8 Detailed Examples Of Giving Employee Feedback

Whether we realize it or not, we’re always giving or receiving feedback.

Sometimes it’s explicit, like in a one-on-one meeting, or it’s implicit, through our tone of voice and body language.

We might not realize the image we’re giving off, so we need to be mindful of this.

Also, when receiving feedback, it’s natural to take it as a personal attack and shut yourself off as a result. Instead, try to look at the feedback as a learning opportunity and grow from it.

Before I go through 8 examples of how to give feedback correctly, let’s look at some important things to keep in mind when giving employee feedback.

Tips for more effective feedback

It’s amazing how much psychology and subtleties are involved in giving feedback.

While some of this might seem like overkill, it’s really not. People are more sensitive than you might think, so it’s important to be compassionate when giving your feedback.

Focus on the behavior, not the person

This is probably the most important tip. The feedback shouldn’t be a personal attack, but it should be helpful and meant to get them to improve a certain behavior.

One idea that works well for this is to explain how the behavior makes you feel. By doing this, it forces you to focus on the behavior.

For example:

I noticed you haven’t shown up for the last two team meetings. I’m worried that you missed some important information. Can we meet to discuss what you missed?

This is better than saying something like, “You obviously don’t care about this team since you don’t show up for the meetings.”

Remember the feedback is simply your opinion

Sometimes leaders will say something like “they feel,” “we think,” or something along the lines of making it look like everyone agrees with your feedback.

This is done to both make the message more powerful and shift the blame away from you.

While this might seem like a smart idea in theory, you should use “I” instead. It will allow the employee to empathize with you (especially if you include how it makes you feel).

Again, remember that feedback is simply your opinion.

Don’t do the feedback sandwich

Many people will tell you that the feedback sandwich works to soften the blow of feedback and that it’s a great idea.

Don’t do it.

It’s really not a good idea. A research paper called Tell Me What I Did Wrong1 looked at how different people responded to feedback, and it found that the feedback sandwich doesn’t work most of the time.

From the research paper:

The negative feedback is often buried and not very specific.

A much smarter idea is to just be straightforward. Employees will appreciate your honesty.

The problem is that people only hear the positive part of the feedback and stop listening once you’ve gotten to the negative part.

Don’t forget the positive

When feedback is mostly negative, studies have shown that it discourages future effort.2

Remember to highlight and recognize good effort to keep employees motivated. Don’t use it as part of a sandwich, but keep in mind that positive efforts need to be noticed.

Follow up

This one might seem obvious, but remember to follow up with whomever you gave feedback to.

The feedback is pretty pointless unless the employee improves and gets better at what they do, so make sure to follow up after a certain amount of time to see how it’s going. Offer your support throughout the entire process.

Examples of feedback given correctly

Here are 8 examples of employee feedback that you can start using today.

An employee seems disengaged

If an employee is disengaged, to figure out if something is bothering them you’ll want to:

Show them you’re noticing/looking out for them

Tell them how it makes you feel

Offer help

Here’s what you can say:

I noticed you don’t seem as happy as you usually do, and obviously that makes me feel like I’m doing something wrong.

Is everything okay? I think if we met once a week to make sure everything’s going okay, you’d be much happier.

An employee didn’t deliver a project on time

While this sucks, there’s not much you can do about it. No point in getting mad, just make sure that this doesn’t happen again. Everyone needs to be accountable for their work, so when giving feedback about this, you’ll want to:

Highlight why this is important

Motivate them for next time

Offer ideas to improve

Here’s what you can say:

The project wasn’t delivered on time, do you have any idea why?

As you know, we’re trying to get everything organized for the new website, so if you’re late on a project, it slows down the rest of the team.

We’ll just make sure that for next time, you have more time and resources to finish on time. The new website is going to be sick! I think for next time, what you could do is schedule blocks of time maybe one day a week to make sure that you’re not overloaded with work towards the end.

I tried that on my last project and it made a huge difference.

An employee made a mistake with a client

You want to do everything in your power to make sure this never happens again; the clients are too important.

Mistakes happen, but everyone needs to have everything they need so that it doesn’t happen again. When giving feedback about this, you’ll want to go into detail explaining what happened so they’re better equipped:

Tell them not to worry; it can be fixed

Explain to them what happened so they understand for next time

Offer help

Here’s what you can say:

Not a big deal, but for next time, remember to update their billing information before you send them their access key.

The way the access key number works is based on their billing info, so it’s super important. But don’t worry, we’ll just send them an apology email and do it manually right now.

If you want to set up some time to go over how the software works, I’d be happy to show you; no problem.

An employee was rude to a coworker

Ideally, everyone on the team works well together and collaborates smoothly, but tension between coworkers is a natural thing that occurs often. You want to put a stop to this one quickly.

Explain why you’re talking to them and not the coworker

Don’t blame, listen to their side

Offer advice

Here’s what you can say:

Stacey asked me to have a chat with you about something you said earlier. I don’t think she was comfortable saying anything so I offered to do it.

I’m curious, can you let me know what happened? I’m assuming it was a misunderstanding, but of course I want us all to get along.

If it was me, I’d wait until the end of the day and then apologize to her, maybe ask to go eat lunch together to talk about it.

An employee doesn’t get along with anyone

This situation is a bit more troubling, but again, you’ll want to focus on the behavior rather than the person.

Be straightforward

Offer ideas for a workaround

Here’s what you can say:

I just wanted to let you know that I’ve gotten a few complaints recently from some people on the team.

I wanted to chat with you directly about it to see if there was anything we can do. It might be because you’re stressed, but I think when you raise your voice it sometimes rubs people the wrong way, which might be why they’re perceiving it as rude.

I wonder if working from home one day a week might help with some of the stress that you’re feeling.

An employee didn’t set good goals

This is a tricky one, because you don’t want to totally demotivate them; they might be upset enough that they didn’t hit their goals. Remember to:

Be positive

Be specific about what they could have done better

Here’s what you can say:

Seriously, great job with your goals this quarter. It’s fine that you didn’t achieve all of them; I just thought we could go through them to see where you could have done better.

I think your goals might be too aggressive. For next time, I would set only 2 goals instead of 5. That way, you’ll be able to focus exclusively on those 2.

An employee doesn’t take initiative

When you’re giving feedback about this one, remember to:

Tell them how it affects you

Offer help and advice

Here’s what you can say:

I notice that you’re not taking as much initiative as you used to be. That makes me feel like I did something wrong. Did I say or do anything recently to upset you?

An employee has poor time management

Time management is a tough thing to get right and is a constant process of optimization. But if it’s becoming a problem, then you’ll need to give some feedback. When you’re giving feedback about this one, remember to:

Tell them how it affects the team

Offer tips

Here’s what you can say:

I’ve been noticing that you weren’t able to manage your time for the last 3 tasks.

Other people on the team weren’t able to get their work done and so it created some issues for other departments. We’ll figure out how to get it fixed for next time, though.

I used to have that problem too, but then I discovered a tool to help with that. Personally, I use a tool called RescueTime; it’s been a life-saver.

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How To Design Your Company’s Digital Transformation

The September issue of the Harvard Business Review features a cover story on design thinking’s coming of age. We have been applying design thinking within SAP for the past 10 years, and I’ve witnessed the growth of this human-centered approach to innovation first hand.

Design thinking is, as the HBR piece points out, “the best tool we have for … developing a responsive, flexible organizational culture.”

This means businesses are doing more to learn about their customers by interacting directly with them. We’re seeing this change in our work on d.forum — a community of design thinking champions and “disruptors” from across industries.

Meanwhile, technology is making it possible to know exponentially more about a customer. Businesses can now make increasingly accurate predictions about customers’ needs well into the future. The businesses best able to access and pull insights from this growing volume of data will win. That requires a fundamental change for our own industry; it necessitates a digital transformation.

So, how do we design this digital transformation?

It starts with the customer and an application of design thinking throughout an organization – blending business, technology and human values to generate innovation. Business is already incorporating design thinking, as the HBR cover story shows. We in technology need to do the same.

Design thinking plays an important role because it helps articulate what the end customer’s experience is going to be like. It helps focus all aspects of the business on understanding and articulating that future experience.

Once an organization is able to do that, the insights from that consumer experience need to be drawn down into the business, with the central question becoming: What does this future customer experience mean for us as an organization? What barriers do we need to remove? Do we need to organize ourselves differently? Does our process need to change – if it does, how? What kind of new technology do we need?

Then an organization must look carefully at roles within itself. What does this knowledge of the end customer’s future experience mean for an individual in human resources, for example, or finance? Those roles can then be viewed as end experiences unto themselves, with organizations applying design thinking to learn about the needs inherent to those roles. They can then change roles to better meet the end customer’s future needs. This end customer-centered approach is what drives change.

This also means design thinking is more important than ever for IT organizations.

We, in the IT industry, have been charged with being responsive to business, using technology to solve the problems business presents. Unfortunately, business sometimes views IT as the organization keeping the lights on. If we make the analogy of a store: business is responsible for the front office, focused on growing the business where consumers directly interact with products and marketing; while the perception is that IT focuses on the back office, keeping servers running and the distribution system humming. The key is to have business and IT align to meet the needs of the front office together.

Remember what I said about the growing availability of consumer data? The business best able to access and learn from that data will win. Those of us in IT organizations have the technology to make that win possible, but the way we are seen and our very nature needs to change if we want to remain relevant to business and participate in crafting the winning strategy.

We need to become more front office and less back office, proving to business that we are innovation partners in technology.

This means, in order to communicate with businesses today, we need to take a design thinking approach. We in IT need to show we have an understanding of the end consumer’s needs and experience, and we must align that knowledge and understanding with technological solutions. When this works — when the front office and back office come together in this way — it can lead to solutions that a company could otherwise never have realized.

There’s different qualities, of course, between front office and back office requirements. The back office is the foundation of a company and requires robustness, stability, and reliability. The front office, on the other hand, moves much more quickly. It is always changing with new product offerings and marketing campaigns. Technology must also show agility, flexibility, and speed. The business needs both functions to survive. This is a challenge for IT organizations, but it is not an impossible shift for us to make.

Here’s the breakdown of our challenge.

1. We need to better understand the real needs of the business.

This means learning more about the experience and needs of the end customer and then translating that information into technological solutions.

2. We need to be involved in more of the strategic discussions of the business.

Use the regular invitations to meetings with business as an opportunity to surface the deeper learning about the end consumer and the technology solutions that business may otherwise not know to ask for or how to implement.

The IT industry overall may not have a track record of operating in this way, but if we are not involved in the strategic direction of companies and shedding light on the future path, we risk not being considered innovation partners for the business.

We must collaborate with business, understand the strategic direction and highlight the technical challenges and opportunities. When we do, IT will become a hybrid organization – able to maintain the back office while capitalizing on the front office’s growing technical needs. We will highlight solutions that business could otherwise have missed, ushering in a digital transformation.

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About Sam Yen

Sam Yen is the Chief Design Officer for SAP and the Managing Director of SAP Labs Silicon Valley. He is focused on driving a renewed commitment to design and user experience at SAP. Under his leadership, SAP further strengthens its mission of listening to customers´ needs leading to tangible results, including SAP Fiori, SAP Screen Personas and SAP´s UX design services.

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How Productive Could You Be With 45 Minutes More Per Day?

Chances are that you are already feeling your fair share of organizational complexity when navigating your current company, but have you ever considered just how much time is spent across all companies on managing complexity? According to a recent study by the Economist Intelligence Unit (EIU), the global impact of complexity is mind-blowing – and not in a good way.

The study revealed that 38% of respondents spent 16%-25% of their time just dealing with organizational complexity, and 17% spent a staggering 26%-50% of their time doing so. To put that into more concrete numbers, in the US alone, if executives could cut their time spent managing complexity in half, an estimated 8.6 million hours could be saved a week. That corresponds to 45 minutes per executive per day.

The potential productivity impact of every executive having 45 minutes more to work every single day is clearly significant, and considering that 55% say that their organization is either very or extremely complex, why are we then not making the reduction of complexity one or our top of mind issues?

The problem is that identifying the sources of complexity is complex in of itself. Key sources of complexity include organizational size, executive priorities, pace of innovation, decision-making processes, vastly increasing amounts of data to manage, organizational structures, and the pure culture of the company. As a consequence, answers are not universal by any means.

That being said, the negative productivity impact of complexity, regardless of the specific source, is felt similarly across a very large segment of the respondents, with 55% stating that complexity has taken a direct toll on profitability over the past three years. This is such a serious problem that 8% of respondents actually slowed down their company growth in order to deal with complexity.

So, if complexity oftentimes impacts productivity and subsequently profitability, what are some of the more successful initiatives that companies are taking to combat these effects? Among the answers from the EIU survey, the following were highlighted among the most likely initiatives to reduce complexity and ultimately increase productivity:

Making it a company-wide goal to reduce complexity means that the executive level has to live and breathe simplification in order for the rest of the organization to get behind it. Changing behaviors across the organization requires strong leadership, commitment, and change management, and these initiatives ultimately lead to improved decision-making processes, which was reported by respondents as the top benefit of reducing complexity. From a leadership perspective this also requires setting appropriate metrics for measuring outcomes, and for metrics, productivity and efficiency were by far the most popular choices amongst respondents though strangely collaboration related metrics where not ranking high in spite of collaboration being a high level priority.

Promoting a culture of collaboration means enabling employees and management alike to collaborate not only within their teams but also across the organization, with partners, and with customers. Creating cross-functional roles to facilitate collaboration was cited by 56% as the most helpful strategy in achieving this goal.

More than half (54%) of respondents found the implementation of new technology and tools to be a successful step towards reducing complexity and improving productivity. Enabling collaboration, reducing information overload, building scenarios and prognoses, and enabling real-time decision-making are all key issues that technology can help to reduce complexity at all levels of the organization.

While these initiatives won’t help everyone, it is interesting to see that more than half of companies believe that if they could cut complexity in half they could be at least 11%-25% more productive. That nearly one in five respondents indicated that they could be 26%-50% more productive is a massive improvement.

The question then becomes whether we can make complexity and its impact on productivity not only more visible as a key issue for companies to address, but (even more importantly) also something that every company and every employee should be actively working to reduce. The potential productivity gains listed by respondents certainly provide food for thought, and few other corporate activities are likely to gain that level of ROI.

Just imagine having 45 minutes each and every day for actively pursuing new projects, getting innovative, collaborating, mentoring, learning, reducing stress, etc. What would you do? The vision is certainly compelling, and the question is are we as companies, leaders, and employees going to do something about it?

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About Michael Rander

Michael Rander is the Global Research Director for Future Of Work at SAP. He is an experienced project manager, strategic and competitive market researcher, operations manager as well as an avid photographer, athlete, traveler and entrepreneur. Share your thoughts with Michael on Twitter @michaelrander.

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Everything You Know About Leadership Is Wrong

Companies that begin life digitally operate differently from the incumbents they threaten and unseat. Employees at digital companies don’t waste time gathering and analyzing information; they use live data to make decisions. They don’t need to wade through organizational hierarchies to get permission to act; their leaders explain business goals and then empower them to use their best judgment.

To compete, incumbent companies have to transform not only decision-making processes and hierarchies that have hardened over decades but also the nature of leadership itself. The leadership strategies and behaviors that drove success in the knowledge economy aren’t sufficient to navigate a successful transition to the digital economy.

Two-thirds of Global 2000 CEOs will center their business strategies on digital transformation by the end of 2017, according to IDC. But few business executives today have the leadership mindset or skills necessary for these strategies to succeed, according to the Leaders 2020 study conducted recently by SAP, Oxford Economics, and McChrystal Group. The study found that only 16% of executives are ready to lead their companies through this transformation.

Leaders must lead differently if their companies are to transition to the digital economy and reap its rewards. In 10 years, for example, 75% of the companies that were listed on the S&P 500 Index in 2012 will have been replaced, according to a study by Innosight. Meanwhile, global competition is heating up. Rising disposable income in emerging economies has sparked the advent of new rivals—and in a survey by consulting firm Accenture, 70% of marketers in those economies expressed confidence in their ability to execute a digital business transformation. In mature economies, the figure was just 38%.

But it’s not too late to learn the essentials of digital leadership.

Communicate the Digital Mission

Fostering an organization whose employees have the skills, tools, authority, and information they need to make decisions in the moment begins with leaders who can formulate and communicate the digital mission. Randall Stephenson, chairman and CEO of AT&T, understands the forces driving digital transformation. Under his guidance, AT&T’s lines of business have expanded—both organically and through acquisitions—to include extensive digital operations, like DirecTV and potentially, as of press time, Time Warner, according to The New York Times. So even as AT&T continues to compete for market share against established and startup telecommunications providers, the company is going head-to-head against digitally based companies like Amazon and Google.

Every business must become digital and work in the cloud, but the change doesn’t merely mean making acquisitions, buying new technology, and rewriting org charts. A new digital workforce is needed as well to meet the transformation challenge. And like the companies they serve, the members of this new workforce will have to develop new abilities and prepare to take on new roles.

That reality is the impetus for Stephenson’s ambitious initiative to transform his company by transforming his team. Through a program launched nearly three years ago, AT&T is underwriting education and professional development opportunities for employees who are willing to pursue the studies on their own time. Those who take advantage of the offer can learn new computing skills that align with the company’s blueprint for digital transformation.

AT&T’s education plan shows the extent to which data is driving a profound change in employees’ daily tasks, functions, and core value to the company. Until recently, businesses sought knowledge workers who were capable of reviewing, assessing, analyzing, and disseminating data in support of decision making. But in the digital economy, companies must be able to respond in the moment to customer, market, and competitive changes. Reviewing masses of data and following traditional hierarchical decision-making processes defeats that goal. To succeed and, in truth, to survive, companies must have that data available when they need it and make a decision in the right moment.

Invest in Understanding How Work Gets Done

With that in mind, digital leaders must invest in understanding how work gets done and then commit to adjusting processes, deploying the right technology to support those processes, and measuring what adds value for customers and, therefore, to the bottom line. Yet only half of the executives surveyed by Oxford Economics rated their companies’ senior leaders as highly proficient in using the technology necessary for transformation.

Digital Leadership in Hard Numbers

Executives who have already established themselves as digital leaders demonstrate the value of their initiatives in hard numbers, according to the Oxford Economics study Leaders 2020. For example, their companies are much more likely to sustain top financial performance in terms of both revenue and profitability. Where leadership has embraced digital, companies:

Are 38% more likely to report strong revenue and profit growth

Have more mature strategies and programs for hiring skilled talent

Report one and a half times more effective collaboration, which contributes to productivity

What’s more, becoming digitally savvy isn’t enough. Leaders’ aptitude for cultivating teams and work environments that can make good use of technology is also essential. Indeed, nearly 80% of the companies considered farthest along in digital maturity make data-driven decisions, according to the Oxford Economics study (see Digital Leadership in Hard Numbers). Meanwhile, 53% of respondents were found to be clinging to old-school decision-making styles and failing to map decisions to strategy. As a result, only 46% qualified as equipped to make decisions in real time.

Lead by Simplifying

Digital leaders make it a priority to continually simplify processes and decision-making procedures to reduce institutionalized complexity and bureaucracy. These impediments take a real toll. A study by the Economist Intelligence Unit found that organizational complexity costs businesses up to 10% of profits. Flattening organizational hierarchies and encouraging transparency and organization-wide inclusivity in the decision-making process can help erase such losses, according to the Oxford Economics study.

Achieving these goals doesn’t require a committee. Empowering people at lower levels to make business-critical decisions based on available data has a natural flattening effect on the hierarchy. And as individuals and the enterprise as a whole become accustomed to having access to real-time data that speeds responsiveness, decision making becomes distributed across the organization.

That doesn’t automatically mean that the organizational pyramid is dead. Rather, it empowers employees, the organization, and leadership by placing responsibility for individual responses and actions in the hands of the people best equipped to carry them out, take ownership of the results, and ensure their success. This key characteristic distinguishes digital workers from knowledge workers: they have access to the data necessary to drive the right decisions at the right time, regardless of where they appear on the organizational chart. This not only empowers people at lower levels but also eases the bureaucratic burden on upper management, which is then freer to focus its time and energy on leading the organization forward instead of directing its day-to-day and even minute-by-minute activities.

Lead by Getting Ahead of the Customer

Creating an organization that’s capable of capturing data and making decisions in the moment can transform customer relationships. Besides responding to immediate customer needs, digitally transformed organizations can also predict emerging requirements, even before the customer is fully conscious of them.

To achieve this, digital leaders must be able to view digital in terms of its ability to support innovation: to make it possible for the business to deliver an array of services and advantages that it wasn’t possible to deliver before.

“The challenge is to not ask the question, ‘How does this affect my business?’ That’s inherently a defensive, firm-centric question,” says David Rogers, author of The Digital Transformation Playbook and a member of the faculty at Columbia Business School. “Instead, firms need to look at every new technology and digital capability and ask, ‘How might this allow us to offer new forms of value to our customers that we could not have done in the past?’ And be continuously looking.”

Being plugged into digital’s power to transform customer relationships thus allows an executive to evolve into a digital leader with the vision and the tools necessary to conceive and implement continuous innovation.

Concentrate on Team Dynamics and Employee Engagement

Millennial leadership is well suited to understand the human side of digital transformation. Digital leaders of older generations must recognize the importance of inviting and acting on input from Millennials, which is essential to inspiring them to perform at their best—and to achieving the overall goals of digital transformation.

Digital leaders must also understand that encouraging diversity in their workforce isn’t simply a matter of fairness; it’s also a source of competitive advantage. Leaders who build diverse organizations have more engaged, productive employees, as well as higher levels of innovation, according to the Oxford Economics study. This in turn leads to better bottom-line results. Companies that reported higher revenue and profitability growth were more likely to cite the positive impact of diversity on their numbers.

Despite this, the study found that only 60% of companies have adequate programs to ensure that they are developing a digital workforce. The shortfall is hurting companies’ ability to hire and retain talent: only 53% say they are successful in attracting qualified applicants.

This problem will only get worse as Baby Boomers exit the workforce. Digital leaders will be increasingly pressured to maintain stability and continuity in their workforces. The challenge will be especially difficult for companies that lag in meeting the expectations of professionals who have entered the workforce in the era of the gig economy. They expect to make numerous career moves and don’t necessarily see length of tenure as a priority.

Thus, companies need processes for bringing new staff members up to speed as quickly as possible while optimizing their productivity, encouraging them to make constructive contributions to the business, and motivating them to deliver their best performance. They must also develop programs for continuous learning and job rotations to engage and retain workers who may not otherwise remain with the company as long as they would have in past generations.

Address the Generation Gap

Millennials and Generation Z have different expectations of what it means to be an employee and how to use technology than other generations do. They expect collaboration across the hierarchy, which is important to keeping them engaged with the organization and with their personal passions. Fostering a sense of meaning within the workplace, then, is another element of digital leadership; leaders must make the company a place where employees feel as engaged and rewarded as they can be and can do their best work.

In this respect and many others, most businesses are contending with a generation gap. The Oxford Economics study found that in comparison to older executives, Millennial executives have a much more pessimistic view of their organization’s ability to perform well in such key areas as using technology to achieve competitive advantage, collaborating internally, inspiring employees, and fostering an organizational culture that promotes feedback and reduces bureaucracy. In addition, the Millennials are more conscious of—and place a premium on—diversity and its benefits. Addressing that generational disconnect is key to digital leadership.

When today’s mid- and late-career executives entered the workforce, it was understood that younger workers invested the early years of their professional lives paying their dues. But that model no longer works in a market in which a company’s future depends on an approach to digital transformation that comes most naturally to younger executives. And those executives will not invest themselves and their expertise in companies that fail to recognize and respect Millennial workplace priorities.

Help Employees Address Future Challenges

Digital transformation isn’t just altering employees’ expectations of their careers. It’s also remaking jobs and what work itself entails. In response to a survey by consulting firm Cap Gemini, 77% of companies reported that they saw digital skill gaps as the chief obstacle to their digital transformation.

Their concerns are well founded. Oxford University examined 702 job descriptions across all job types and found that 47% were likely to be replaced by technology within a decade. Another 19% were moderately likely to be replaced. With that in mind, part of the leadership challenge in digital transformation is anticipating how people will work in this world and how artificial intelligence, robots, and people will be integrated into a new and more efficient workforce. How will people interact with these digital forces in the workplace? What will it mean in human terms?

Digital leaders can’t expect employees to keep up with these changes on their own: things are simply moving too quickly. AT&T’s Stephenson recognizes this. The New York Times reported that the company’s digital transformation is projected to make 30% of current jobs obsolete by 2020. That’s why, to get ahead of that challenge, Stephenson ordered the creation of AT&T’s training program, which includes an extensive curriculum of online and classroom courses.

This approach illustrates a key characteristic of digital leaders: the ability to think conscientiously about where their companies are headed, what skills their people will need, and how they can help them develop the skills they’ll need as their roles evolve. Digital leaders are also able to articulately communicate to employees where the world is headed so that they are motivated to get there and be productive now and in the future.

Unleash a New Generation of Executives

Companies can no longer afford to delay recognizing the digital sea change that is transforming decision making and the capacity to respond in real time to challenges and opportunities. Led by Millennial executives, the new digital workforce is ready to spark unprecedented performance improvements in organizations that do not constrain their ability to communicate, collaborate, and contribute. Digital leaders are devising strategies for harnessing their energy, enthusiasm, and innate understanding of digital capacities to achieve higher levels of productivity and profitability. The remaining leaders face a choice: embrace this change or get left behind. D!

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The Digitalist Magazine is your online destination for everything you need to know to lead your enterprise’s digital transformation.

Read the Digitalist Magazine and get the latest insights about the digital economy that you can capitalize on today.

About Michael Rander

Michael Rander is the Global Research Director for Future Of Work at SAP. He is an experienced project manager, strategic and competitive market researcher, operations manager as well as an avid photographer, athlete, traveler and entrepreneur. Share your thoughts with Michael on Twitter @michaelrander.

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What Does Blockchain Mean To The CFO?

In my previous blogs, I’ve stated that CFOs need to play a strong, active role as an independent challenger for the business while assessing risks – balancing risk and opportunity for the business. I’ve also covered changes to our role as digitization begins to envelop our organizations. The digital economy will impact many things, that we can be sure of.

In the digital economy, collaboration is increasingly important, and the task of the CFO is to establish this collaboration role, and someone needs to establish collaborative digital finance processes and safeguard their effectiveness and efficiency. In many cases, CFOs have taken that role. Looking to next year, there’s a huge expectation that the technology known as “blockchain” will gain greater prominence in practical business applications, and I believe CFOs can and should enter the picture of this discussion early on. It’s not the realm of the technologists alone, and many are pointing towards blockchain as an underpinning of a digital economy.

The blockchain movement and its accompanying technological capabilities are incredibly intriguing, and a quick Google search delivers about 416,000 results, underscoring the interest. If we can build use cases and applications, blockchain can radically change the way we do business. As a CFO, I need to be mindful of risks, and some associated with this technology are difficult to comprehend upon first reflection. However, as I wrote previously, this is typical of the CFO in the digital economy. Both on the business and compliance sides, we are able to leverage traditional skill sets and our knowledge while stepping into unknown territory in both areas at the same time.

Singapore has announced the city state’s central bank will explore blockchain by launching a pilot project with the country’s stock exchange and eight local and foreign banks to use the technology for interbank payments. While blockchain technology, which emerged from bitcoin, is expected to draw interest by banks and other centralized institutions, it’s expected that companies like Amazon, Facebook, and Google will be early adopters as well.

Being mindful of risks

Given that a lot of information is shared in a blockchain, I wonder what it would do to the system – beginning with fraud and going onward along the risk chain – if and how someone could break into it. I’m sure there’s a good answer – maybe hackers could hardly or never access all of information, given its distributed ledgers. But my point here is that the role as a CFO is to assess the risk and benefit. The latter would include an analysis of the energy footprint of blockchain technology. Is the hardware used sufficiently and is it energy efficient? Are the algorithms computationally efficient in this regard?

Blockchain promises a huge benefit because it increases how we do business and the speed at which it can be conducted. It promises to eliminate the intermediaries and bring new life back to some professions. Some of the technology’s early adopters are public audit firms, and their perspective is in the public interest. I saw a presentation from a utilities company, and it was mind boggling what they’re exploring with blockchain. They can see a case extending collaboration and interaction all the way to the customer in a way they’ve been previously unable to achieve.

From the finance perspective, there’s a limit to optimizing processes and the number of people involved. Even with full robotics, oversight is needed, i.e., someone who watches the robot. When we reach those limits, we turn to technology to help increase volumes and transaction processes. I see a lot of potential for blockchain in this regard, with new, associated business models that have potential.

A hot topic in financial services

At I recent forum for financial services, I co-hosted a dinner where blockchain was the topic. It was amazing to see how people had picked up on the topic, and there were a lot of questions. Many had similar questions about exploring the risks and benefits, and I think it’s fair that everyone took away the sense that they need to keep their eyes on and learn more about it.

Consistently, I see a lot of people taking note, especially those close to the financial market or treasury. Predictably, IT departments are keenly curious, but I think CFOs need to step up their game and begin looking more closely, forming points of view to guide their businesses. It ties in with traditional CFO skills like business modeling, risk and compliance, and advising the business. This remains at the core of our role.

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About Matthias Heiden

Dr. Matthias Heiden, senior vice president, regional CFO, Middle and Eastern Europe (MEE), is responsible for the field finance organization of MEE. In this role, he supports the organization in managing P&L, continuously driving strategic finance transformation initiatives initiated by Corporate Finance together with the other regional CFOs. This team helps improve business-related processes and supports the Market Unit CFOs in their role as business facilitator and transformation agent.